Gannett to acquire Belo in $2.2 billion deal

Gannett Co., the global media company that owns USA TODAY, said Thursday it will buy Belo Corp. for $2.2 billion in a deal that will make Gannett the USA's fourth largest owner of major network affiliates, reaching nearly a third of U.S. households.

Gannett will acquire all outstanding shares of Belo for $13.75 per share in cash, or approximately $1.5 billion, plus assume $715 million in existing debt for an enterprise value of approximately $2.2 billion. The transaction, which has been unanimously approved by the boards of directors of both companies, represents a 28.1% premium to the closing price of Belo common stock on June 12, 2013.

Belo owns and operates 20 TV stations - nine in the top 25 markets - and their associated websites, including in Texas and the Pacific Northwest where Gannett does not have a major presence.

President and Chief Executive Officer Gracia Martore of Gannett, said, "We are thrilled to bring together two highly respected media companies with rich histories of award-winning journalism, operational excellence and strong brand leadership."

Belo's President and Chief Executive Officer Dunia Shive said, "This is an outstanding and financially compelling transaction for our shareholders. It is also a testament to the tremendous value our employees have created over Belo's long history and to the strength of our brand in the media industry."

Headquartered in McLean, Virginia, Gannett engages more than 100 million people every month through its network of broadcast, digital, mobile and publishing properties. In addition to USA TODAY, Gannett owns regional newspapers such as the Detroit Free Press and The Courier-Journal in Louisville, Ky.

The acquisition nearly doubles Gannett's current broadcast portfolio from 23 to 43 stations, including stations to be serviced by Gannett through shared services or similar sharing arrangements.

Shares in Gannett closed down 1.59% on Wednesday but have soared to $19.85 from $12.50 in July as the company has aggressively pursued efforts to diversify its business model.

Gannett earned $104.6 million, or 44 cents per share, in the January-March period. That was up from $68.2 million, or 28 cents per share, a year earlier. Revenue grew 1.6% to $1.24 billion from $1.22 billion.